Landed cost is everything it costs to get imported goods into your warehouse, not just the supplier's invoice price. The basic formula is goods + freight + insurance (= CIF) + import duty + import taxes (VAT and PPh 22) + port, customs broker and trucking costs. In Indonesia, duty and import taxes are calculated on the CIF customs value in rupiah, converted at a weekly tax exchange rate. This guide explains each component and walks through an example you can repeat in the landed cost calculator.
The components of landed cost
From FOB to CIF
If you buy FOB, the price covers the goods until they are loaded at the origin port. You still need to add ocean freight and insurance to reach a CIF value. Buy CFR and freight is included but insurance is not. The FOB-CIF calculator handles the conversion. Remember that Incoterms split costs and risks between the parties, while Indonesian duty is always assessed on the CIF value, whatever rule your contract uses. More in the Incoterms 2020 guide.
Import duty and taxes
- Customs value: the CIF value multiplied by the tax exchange rate (NDPBM) set weekly by the Minister of Finance. See customs value and tax exchange rate.
- Import duty: the BTKI 2022 rate (PMK No. 26/PMK.010/2022) times the customs value. The rate depends on the HS code and may be lower under a trade agreement.
- Import value: customs value + import duty (+ excise, if any).
- Import VAT: an effective 11% of the import value for non-luxury goods (a nominal 12% rate on a base of 11/12 since 1 January 2025, PMK 131 of 2024).
- Import PPh 22: commonly 2.5% with an importer ID (API), 7.5% without one, and 10% for certain goods (PMK 34/PMK.010/2017 as amended).
- Luxury-goods sales tax (PPnBM): only for goods classified as luxury.
Use the tax rate finder as a starting point, then confirm against BTKI and the latest regulations.
Local charges at destination
Once the vessel arrives, there are carrier or forwarder charges (such as DO and admin fees), the terminal handling charge, terminal storage, customs broker fees and trucking to your warehouse. Collect or return the container late and demurrage and detention start to accrue. Amounts vary; check the operator's and carrier's official tariffs.
Worked example
An importer buys 2,000 units of kitchenware FOB Ningbo for USD 9,000, with ocean freight of USD 850 and insurance of USD 150. The illustrative tax rate is IDR 16,000 per USD, the illustrative duty rate is 10%, and the importer holds an API. This is a calculation example, not the actual rate for any HS code.
| Component | Calculation | IDR |
|---|---|---|
| CIF value | USD 9,000 + 850 + 150 = USD 10,000 | |
| Customs value | USD 10,000 × IDR 16,000 | 160,000,000 |
| Import duty 10% | 10% × 160,000,000 | 16,000,000 |
| Import value | 160,000,000 + 16,000,000 | 176,000,000 |
| Import VAT 11% (effective) | 11% × 176,000,000 | 19,360,000 |
| PPh 22 at 2.5% | 2.5% × 176,000,000 | 4,400,000 |
| Total import levies | 16,000,000 + 19,360,000 + 4,400,000 | 39,760,000 |
| Local charges (illustrative) | DO and THC 4,000,000, broker 1,500,000, trucking 4,000,000 | 9,500,000 |
| Landed cost | 160,000,000 + 39,760,000 + 9,500,000 | 209,260,000 |
That is IDR 209,260,000 ÷ 2,000 = IDR 104,630 per unit. If the importer is VAT-registered and can credit the import VAT, and PPh 22 is offset as an income-tax credit, the cost that finally sits in the product is IDR 185,500,000, or IDR 92,750 per unit. The cash needed at import, however, is still IDR 209,260,000. Notice too that the levies of IDR 39,760,000 equal 24.85% of the customs value, far more than the 10% duty rate people often use as a shortcut, because VAT and PPh 22 are charged on a base that already includes duty. The local charges exclude VAT on local services. All figures are estimates; check the official BTKI rates and the latest regulations.
Preferential tariffs under trade agreements
Indonesia is party to many trade agreements, including ATIGA (ASEAN), ACFTA (ASEAN-China) and RCEP. Goods that meet the rules of origin can enter at a preferential duty rate, often well below the general rate. The conditions: the supplier provides a valid certificate of origin in the agreement's format (for example Form D under ATIGA or Form E under ACFTA), its data matches the invoice and B/L, and direct-consignment or transit rules are respected. If the certificate is late, in the wrong format or inconsistent, customs may apply the general rate.
In the example, if the preferential rate for those goods were 0%, the IDR 16,000,000 duty disappears and the import value falls to IDR 160,000,000. VAT drops to IDR 17,600,000 and PPh 22 to IDR 4,000,000, so total levies come to IDR 21,600,000, a saving of IDR 18,160,000 against the general rate. Preferential rates differ by HS code and agreement, so check the official tariff schedule.
Costs people forget
Beyond the main components, several small items slip through early estimates and still erode margin:
- Bank charges: transfer fees, L/C opening fees and the spread when paying the supplier.
- Permits and surveyors: restricted goods may need an import licence, a surveyor report or a quarantine inspection, each with its own fee and lead time.
- Physical inspection: if the PIB goes to the red channel, expect extra handling, labour and storage during the examination.
- Freight surcharges: a freight quote may exclude bunker or peak-season surcharges.
- Origin costs: buy EXW and origin trucking, export clearance and origin THC become yours, so add them before you reach an FOB value.
List these as separate lines so you can compare two suppliers fairly. A supplier with a lower unit price on EXW terms from an inland city can end up dearer than one quoting FOB near the port.
The tax exchange rate and timing
The tax exchange rate changes weekly and is published by the Fiscal Policy Agency. It can differ from the bank rate at which you pay your supplier. When budgeting, use the latest tax rate plus a buffer, because the applicable rate follows the date set by customs rules, not your purchase date. On a CIF value of USD 10,000, a difference of IDR 200 per USD already shifts the customs value by IDR 2,000,000, before the knock-on effect on duty and taxes.
Common mistakes
- Calculating taxes on the FOB price. Indonesian duty is assessed on CIF, not FOB.
- Using the bank rate. Use the applicable tax exchange rate.
- Wrong HS code. Duty rates and import restrictions follow the HS code; misclassification can lead to underpayment and administrative penalties.
- Forgetting local charges. THC, DO fees, storage and trucking can be a large share of small or LCL shipments.
- Counting on a preferential rate without a valid certificate. Without correct origin documents, the general rate applies.
- Treating VAT and PPh 22 as non-cash. Even if creditable, they are paid up front at import.
Calculate your own landed cost
Enter FOB value, freight, insurance, rates and local charges in the landed cost calculator to get a per-unit cost, then optimise the load in the 3D planner to keep freight per unit as low as possible. Calculator results are estimates; check the official BTKI rates, the tax exchange rate and the latest regulations before you decide.